Management Improvement Carnival #94

The Curious Cat Management blog carnival highlights management blog posts 3 times each month. I have also collected hundreds of online management improvement articles in the Curious Cat Management Library.

  • Why You Should Never Listen to Your Customers by Mark Cuban – “Your customers can tell you the things that are broken and how they want to be made happen. Listen to them. Make them happy. But they won’t create the future roadmap for your product or service. That’s your job.”
  • Pure Genius: Southwest Airlines Baggage Strategy by Eric Joiner – “Consistently sized aircraft, carefully selected destinations and a desire to compete with the big guys only where they can win, has made Southwest profitable where the big guys have failed.”
  • Evolutionary operation by Mark J. Anderson – “a manufacturing improvement method called evolutionary operation (EVOP), which calls for an ongoing series of two-level factorial designs that illuminate a path to more desirable conditions.”
  • Why do we use Kanban? by David Anderson – “(1) Evolutionary, incremental change with minimal resistance (2) Achieve sustainable pace by balance throughput against demand (3) Quantitative Management and emergence of high maturity behavior in alignment with senior management desire to have a highly predictable business (4) Better risk management (the emerging theme in the Kanban community)”
  • MBWA is Not a Gemba Walk by Kevin Meyer – “What if the top executive led groups of people in spontaneous kaizen activities. Teaching, creating, changing. Not just sneaking around and watching.”
  • W.L. Gore: Lessons from a Management Revolutionary by Gary Hamel – Terri Kelly: “Our leaders have positions of authority because they have followers. Rather than relying on a top-down appointment process, where you often get promoted because you have seniority, or are the best friend of a senior executive, we allow the voice of the organization to determine who’s really qualified to be a leader, based on the willingness of others to follow.”
  • How a Simple Office Kanban System Works by Mark Graban – “In setting up a system like this, you just have to be careful that the 2nd bin has enough inventory to last you until the new stock arrives. If you order weekly and the material arrives the day after, the re-order quantity really needs to be six days worth of supply.”
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Taxes per Person by Country

I think that the idea that data lies is false, and that such a notion is commonly held a sign of lazy intellect. You can present data in different ways to focus on different aspects of a system. And you can make faulty assumptions based on data you look at.

It is true someone can just provide false data, that is an issue you have to consider when drawing conclusions from data. But often people just don’t think about what the data is really saying. Most often when people say data lies they just were misled because they didn’t think about what the data actually showed. When you examine data provided by someone else you need to make sure you understand what it is actually saying and if they are trying to support their position you may be wise to be clear they are not misleading you with their presentation of the data.

Here is some data from Greg Mankiw’s Blog. He wants to make his point that the USA is taxed more on par with Europe than some believe because he want to reduce current taxes. So he shows that while taxes as a percent of economic activity is low in the USA taxes per person is comparable to Europe.

Taxes/GDP x GDP/Person = Taxes/Person

France .461 x 33,744 = $15,556

Germany .406 x 34,219 = $13,893

UK .390 x 35,165 = $13,714

US .282 x 46,443 = $13,097

Canada .334 x 38,290 = $12,789

Italy .426 x 29,290 = $12,478

Spain .373 x 29,527 = $11,014

Japan .274 x 32,817 = $8,992

The USA is the 2nd lowest for percent of GDP taxes 28.2% v 27.4% for Japan. But in taxes per person toward the middle of the pack. France which has 46% taxes/GDP totals $15,556 in tax per person compared to $13,097 for the USA. Both measures of taxes are useful to know, in my opinion. Neither lies. Both have merit in providing a understanding of the system (the economies of countries).

Related: Fooled by RandomnessSimpson’s ParadoxMistakes in Experimental Design and InterpretationGovernment Debt as Percentage of GDP 1990-2008 by CountryCommunicating with the Visual Display of DataIllusion of Explanatory Depth

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Management Blog Posts From April 2006

photo of yellow leaves

Here are some of the blog posts from the Curious Cat Management Improvement made in April 2006:

  • PBS Documentary: Improving Hospitals – “Systems thinking allows leaders and staff to see the complex, modern workplace with ‘new eyes’ and turn problems into improvements. It has saved up to 50 percent in costs, thousands of lives, and avoided hundreds of thousands of medical errors.”
  • Manufacturing Jobs Data: USA and China – “So 10-20% of manufacturing jobs disappeared worldwide from 1995 to 2002. China lost between 17% and 34% of their manufacturing jobs; the US lost 11.4%.”
  • People: Team Members or Costs – Both Toyota and GM seek to use technology to improve but Toyota sees the technology as useful to help people to be more efficient, eliminate menial repetitive tasks, eliminate tasks that cause injury… and it seems to me GM sees technology as a way to eliminate people.
  • Why are you afraid of process? – “Process management is necessary for management improvement. That is true in manufacturing, service, government, research and any other environment. The way process management will be done must be modified to be effective.”
  • Most Meetings are Muda – “Given how many people know that many meetings are a waste of time, taking steps to improve meeting effectiveness is a good way to gain some credibility for management improvement activities. Doing so is very visible.”
  • China’s Manufacturing Economy – “The constant mention of the erroding manufacturing sector on the USA I believe leads many to think it is shrinking and small. Yet output continues to increase and the share of worldwide manufacturing output is holding steady.”

Photo by John Hunter in Shenandoah National Park, Virginia, which lies in the Blue Ridge Mountains, a few hours from Washington DC. My travel photo blog includes more pictures.

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Kiva – Giving Entrepreneurs an Opportunity to Succeed

photo of a Kiva entrepreneur

Tony, a Kiva entrepreneur in Pennsylvania, USA looking to manufacturing specialty cars.

I really like Kiva. Kiva lets you lend small amounts of money to entrepreneurs around the world. My latest loan is to a manufacturing entrepreneur in the USA.

When Tony’s 6’0 6″ body could not fit in the traditional supercars, he built his own in 1990. Tony says, “If one door closes I just look for another opening; I don’t give up.” With much patience and hard work he continues to expand his business and hopes to make it a full-time job. With his ACCION USA [the broken link was removed] microloan he has hired two designers to work with him part-time and has purchased a laptop.

I must admit I wouldn’t take this as an investment. It seems a very risky and doesn’t seem that likely to pan out, to me. But I see my loans through Kiva as a way to give people a chance to pursue their dreams. This loans is probably the one I find less compelling from a business point of view (to me), but I like to provide some loans in the USA so I decided to give Tony a chance.

I do try to select loans that look promising and seem to provide the entrepreneur an opportunity that will help them. By which I mean I love finding loans where, for example, they will buy equipment that will improve their productivity or take on new business. Very often loans are to buy raw materials or supplies, which is also fine but the potential gains are often less than something that improves the efficiency (it seems to me). Often this allows the entrepreneur to buy more and grow their business.

I have made nearly 200 loans now. The top country has been Togo (at 12%). I don’t target Togo but I do pay attention to the loan costs to the entrepreneurs (part of my assessment of the good business case for the loan) and some of the micro finance organizations offer good terms to entrepreneurs. Some of the microfinance organizations are more charitable (they may use donations to fund significant parts of the operating expenses, instead of profits from interest on the loans). Read more details on how Kiva works. It also used to be a bit difficult to find loans I really thought were great. It is getting easier to find more options so my guess is that the top few countries now will see declines in their percentages.

So far I have lent to 37 countries. Cambodia is 2nd at 7.7% of my loans, Viet Nam 3rd at 6.7%, Tanzania 4th at 5.1%, Nicaragua 6th at 5.1% along with Kenya, and Ghana and Boliva are 8th at 4.6%. The United States now makes up 2.6% and Mexico 1.5%. The sectors the loans are categorized in are: Services 25%, Food 18%, Manufacturing 17%, Retail 14%, Agriculture 12% and various others. Though the sector categorizations are pretty weak in my opinion (they seem to be fairly inaccurate – so it gives you an idea but it isn’t exact).

The default rate on my loan portfolio is 2.1% (3 defaults). One was in Kenya where $71.50 out of $75 was paid back and then huge civil unrest took place and it defaulted. The other 2 are from the same microfinance bank in Ecuador that was closed down due to mismanagement. In that instance I lost $87.50 out of $100 lent. 94 loans have been fully paid back and 94 are being paid back now.

I would love it if more Curious Cat readers joined Kiva and helped other entrepreneurs. If you do let me know your Kiva page and I will add you to the Curious Cat Kivans page. Also join the Curious Cats Kiva Lending Team.

Related: 100th Entrepreneur LoanThanksgiving: Micro-financing EntrepreneursUsing Capitalism to Make the World BetterKiva Opens to USA Entrepreneur LoansMicroFinance Currency Risk

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Management Improvement Carnival #93

Kevin Meyer is hosting Management Improvement Carnival #93 on the Evolving Excellence blog, highlights include:

  • Seven Virtues of the 21st Century Organization (Weekly Leader): Purpose-driven organic adaptability, values that are operational.
  • Value in Lean (Thinking for a Change): How do you define “value” – there are many ways.
  • Listen to the Naysayers (Evolving Excellence): “Be careful not to discount the opinions of dissenters – you may end up with everyone on the same bus… driving off a cliff!”
  • Solid at the Core (Unfolding Leadership): The advantages – and disadvantages -of inner strength and confidence.

Related: Management Improvement Carnival #44Management Improvement Carnival #60Management Improvement Carnival #76

Not related: @nicoleradziwill – Alex: “Is the Easter Bunny a boy?” Me: “No clue.” Alex: “Well let’s look it up on Google.”

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Aligning Marketing Vision and Management

Why do so many companies market one thing and provide something else? I know it might be easier to sell something different than what you offer your customer today. But if you decide to market one vision, why don’t you change your organization to actually offer that?

I suspect this is substantially due to the outsourced nature of large marketing efforts. It makes sense to me that when you outsource your marketing message creation it isn’t tied to your management system and the two silos can pursue their own visions.

I would imagine marketers would claim they “partner” yada yada yada (and sometimes it actual seems to happen, but not often). As a consumer it sure looks to me like companies outsource marketing to ad agencies that come up with marketing plans that are not in harmony with the real company at all. I can understand putting a positive spin on things, but so much marketing is just completely at odds with how the company operates.

Treating a marketing message as something separate from management is a serious problem. When your marketing message says one thing and your customers get something else that is a problem. I think the message is often based on what the executives wish the company was (and the outsourced marketers think it should be), but it isn’t the customer experience the management system provides.

If you believe the vision of your marketing then make sure your organization has embraced those principles. I think, often, companies would be wise to follow the vision their marketers came up with. But instead they tell customers to expect one thing and manage the organization to provide something else. I just don’t see how that is sensible.

Related: Marketing in a Lean CompanyPackaging ImprovementCustomer Service is ImportantConfusing Customer FocusIncredibly Bad Customer Service from Discover Card
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Management Improvement Carnival #92

The Curious Cat Management blog carnival selects recent management blog posts 3 times each month. Also visit the Curious Cat Management Library for online management improvement articles.

  • The 7 Software Development Wastes by Jack Milunsky – “1) Keep your stories small, and unambiguous. 2) Ensure that each story has well defined acceptance test criteria (assisted by input from the customer). 3) Ensure that your code is well tested. Adopting good Test Driven Development habits will pay back in spades…”
  • Strengths, Weaknesses, Your Team, and You – “Help your people be more successful by helping them develop their strengths and make their weaknesses irrelevant. Help your team be more successful by developing the most effective mix of task assignments.”
  • Plan Vs. Actual – The Swiss Army Knife of Charts by Mark R. Hamel – “The plan vs. actual also spurs PDCA in that the worker is required to identify the root cause of the abnormal condition and ultimately points the worker, team and leadership to effective countermeasures.”
  • Don’t build a roofless home: 3 steps to successfully implementing Counter Measures by JC Gatlin – “Set up a ‘PDCA Implementation Review’ with the entire PDCA group one or two days following the final TARGET date. This should be a simple, short conference call – no more than 15 minutes.”
  • How Google sets goals and measures success by Don Dodge – “Achieving 65% of the impossible is better than 100% of the ordinary – Setting impossible goals and achieving part of them sets you on a completely different path than the safe route. Sometimes you can achieve the impossible in a quarter, but even when you don’t, you are on a fast track to achieving it soon”
  • Creating Employee Engagement, Part 4 by Jamie Flinchbaugh – “Team members must be able to engage in brainstorming, experimentation, and communication to be able to develop, share, and decide on solutions to problems… Skills make this succeed or fail.
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Toyota’s Journey to Lean Software Development

Toyota’s journey from Waterfall to Lean software development by Henrik Kniberg

Toyota builds cars (duh). In the past that didn’t involve much software, and the little software that was needed was mostly developed by suppliers and embedded in isolated components. Toyota assembled them and didn’t much care about the software inside. But “The importance of automatic electronic control system has been increasing dramatically year by year” said Ishii-san.

A modern car is pretty much a computer on wheels! In a hybrid car about half of the development cost is software, it contains millions of lines of code as all the different subsystems have to integrate with each other. He mentioned that a Lexus contains 14 million lines of code, comparable to banking and airplane software systems. Ishi-san concluded that “Therefore Toyota needs to become an IT company”.

Most of Toyota’s ideas about how to do Lean software development resonated well with me. My feeling was that they are on the right track.

One thing bothered me though – the extreme focus on detailed metrics. I agree with the value of visualization, standardization, and data-driven process improvement – but only if used at a high level. My feeling was that Toyota was going to far. They say engineer motivation is critical, but how motivating is it to work in an organization that plans and measures everything you do – every line of code, every hour, every defect, how many minutes it takes to do an estimate, etc?

via: Justin Hunter

Related: Toyota IT OverviewToyota Canada CIO on Genchi Genbutsu and KaizenLean Software DevelopmentMy First Trip to Japan by Peter ScholtesToyota IT for Kaizen

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Bill George on Leadership

Bill George is professor of management practice at the Harvard Business School and former chairman and CEO of Medtronic, the world’s leading medical technology company. Under his leadership, Medtronic’s market capitalization grew from $1.1 billion to $60 billion, averaging 35 percent a year. He is the author of the best-selling Authentic Leadership and a board member of Goldman Sachs, Target, and Novartis.

His board membership at Goldman Sachs certainly leaves him with something to answer for (which I don’t think he does in this webcast). With the damage that company has done to the USA economy you certainly can’t excuse a board member of responsibility for the actions that company has taken. You can listed to his first few minutes and don’t get the idea that he was a leader of the company most responsible for the credit crisis.

His words do sound nice but seem a bit short on much new. Lots of the “new leadership ideas” (like today you can’t have one leader that everyone follows – isn’t that at least 20 years old as a well know bad idea?). Also the idea that an organization exists to provide value to customers not to maximize shareholder value. I understand more people do not understand this point, so it is nice a Harvard MBA professor is pushing this idea (but again it isn’t new at all).

I guess I am a little disappointed in the video but others seem to like it and I do think he makes worthwhile points, just nothing really special (from where I sit). I did like how he discussed value tests come in real life.

I share what seemed to be his opinion that talking abstractly about values is less important than actions you take in the real world. I must admit I am getting more and more frustrated in the lack of moral and ethical values in those with power in our society (this is my feeling, not the speakers). And I do not have must patience for their ability to try to explain away their unethical behavior. I repeatedly see our lack of accountability of those with power (just look at how many people are in jail for all the hundreds of billions of financial fraud in the last few year (what maybe 5 people? 10?) and compare that to those in jail for much much less damaging crimes that have less power). His blog has some posts worth reading.

Related: Jeff Bezos Spends a Week Working in Amazon’s Kentucky Distribution CenterHarvard’s Masters of the ApocalypseAn Introduction to Deming’s Management Ideas by Peter Scholtes (webcast)Eric Schmidt on Management at GoogleLooting: Bankruptcy for Profit

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Management Improvement Carnival #91

The Curious Cat Management Blog Carnival provides links to recent articles to help managers improve the performance of their organization.

  • A Mindless Worker is a Happy Worker “when people are given a chance to participate in creating something good, solving a problem, and play a role in adding value through the use of their mind, hands, and heart, good things happen.”
  • Creating a Culture of Process Improvement by Rip Stauffer – “If you listen and act, you’ll soon find that you can’t keep up with the suggestions for improvement. That will be the beginning of changing the culture to one of improvement.”
  • Creating Employee Engagement by Jamie Flinchbaugh – “Organizations will often want people engaged and even teach them some skills to get them engaged, but fall short of creating a mechanism that actually enables this.”
  • Why do we spend so much time putting out fires? by Dan Markovitz – “The process keeps everyone up to date on where things stand throughout the organization — no tedious, long-winded, meanderings in the 60 minute weekly (or god help you, 90 minute monthly) meeting.”
  • 5 Reasons Why Agile Development Must Be Driven from the Top by Kelly Waters – “Another key concept of agile software development is co-location. Ideally the whole team will all be located in the same place – not just the same office but literally sitting side by side in the same room or space.”
  • Counter Measures: Bringing balance to the process by JC Gatlin – “A Temporary Counter Measure is ‘immediate containment.’ This is an action or series of actions that the PDCA group will take to temporarily remedy the problem. This action may have no connection to the root causes.”
  • Testing in the Data Center (Manufacturing No More) by James A. Whittaker – “This is the challenge of the new century of software. It’s not a process of get-it-as-reliable-as-possible-before-we-ship. It’s health care, cradle to grave health care … prevention, diagnosis, treatment and cure.”
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